Clipping involves positioning one object inside another, creating a parent - child layer relationship. The path of the parent object becomes the new boundaries for the child object. Any areas of the child object which lie outside the parent object's path are masked (hidden).
Any object can act as a parent or child in clipping relationships. Therefore both vector objects and pixel layer content can be either clipped or clipping objects.
When scaling a parent object, child (clipped) objects scale to maintain the correct aspect ratio. Scaling a clipped object has no effect on the parent object. A clipped object can be edited independently from its parent, e.g. adjusting color, opacity, and/or blend mode.
The clipped object is nested within the clipping object on the Layers panel, i.e. it has become a child of the clipping object.
The clipped object can now be moved and edited as needed.